Nick Hodge - Angel Publishing

An Energy Bill for 2008

We could've had this discussion back in June.

It was then that the House passed two energy bills—after weeks of partisan bickering—that wouldn't have any significant long-term impacts on energy supplies or prices.

In late June, the House passed HR 6052, which would provide transit agencies with grants to expand services and subsidize fares. They also passed HR 402-19, which would authorize federal regulators to take "emergency steps" to tighten oversight of oil futures trading.

Neither of those bills has been voted on by the Senate.

Of course, around the time those two less-than-meaningful bills were passed, Congress was also debating other, more meaningful policies, like extending the investment tax credit and production tax credit, opening up the strategic petroleum reserve, and allowing offshore drilling.

None of those measures ever came to fruition.

Then, in late July, these issues came up again, right as Congress was scheduled to begin its five-week recess.

Here are a few bills that were discussed in the two weeks before their vacation, as provided by Reuters:

REIN IN MARKET SPECULATORS. Senate Democrats were blocked from getting a final vote on legislation to curb excessive speculation in energy markets. The bill would have imposed tough position limits on speculators, restricting the number of oil futures contracts they can control. A similar House bill was voted on, but failed. It sought to rein in speculators trading energy and agricultural commodities.
LOW INCOME HOME ENERGY ASSISTANCE PROGRAM. The Senate bill would have doubled to $5.1 billion a federal program that helps senior citizens and poor families pay their summer cooling and winter heating bills.
TAPPING THE STRATEGIC PETROLEUM RESERVE. The House bill would have sold 70 million barrels of oil from the U.S. emergency crude stockpile, which supporters said would have put more supplies on the market and lowered prices.
ENERGY TAX CREDITS. The House bill would have extended renewable tax credits for producing electricity through wind power and installing solar energy equipment
DRILL NOW OR LOSE IT. This House bill would have required oil companies to diligently develop their existing federal leases or return them to the government and require yearly leases in the National Petroleum Reserve in Alaska.

None of those measures were passed, either.

Many other bills have been proposed and were either never debated, passed by only the House or the Senate, or vetoed.

Will We Have an Energy Bill in 2008?

Well, there's hope.

Before their vacation, a group of five Republican and five Democratic senators, called the Gang of 10, composed a comprehensive energy bill. After initial resistance from both sides, the ideas in the bill are now gaining traction.

In fact, three more senators from each party have joined the effort.

Basically, the proposal is something that any rational person could've come up with months ago. Here's a very brief rundown:

Certain areas of the Outer Continental Shelf will be open to drilling and boosting nuclear power, while incentives for wind, solar, energy efficiency, and other renewables will be extended by eliminating $84 billion worth of tax breaks enjoyed by the oil and gas industries.

But there are issues, as usual. I have my own view of the resistance this plan will face, but Business Week does a very nice job:

As the compromise gains momentum, it is creating dilemmas for both parties. There are plenty of reasons to be against it. For one, John McCain's choice for running mate, Alaska Governor Sarah Palin, is a strong advocate of opening up new areas like the Arctic National Wildlife Refuge to the oil and gas industry. Polls also show that Republicans are getting a major boost by blaming Democrats for blocking increases in oil and gas supplies, so why would they give up their best campaign issue? "One man knows we must now drill more in America and rescue our family budgets: ... McCain," says one ad for the GOP Presidential candidate, which accuses Democratic rival Barack Obama of standing in the way.

A compromise with the Democrats would "cut the knees off of Senator McCain," Rush Limbaugh recently charged on his radio show. In addition, oil and gas companies are leaning heavily on their GOP friends to oppose the plan. "Opening up a very, very minor area [to drilling] and punishing the industry while doing it makes absolutely no sense," says Charles T. Drevna, president of the National Petrochemical & Refiners Assn. For their part, Democrats fear losing support among core constituents if they vote to drill.

But despite the possible opposition, the fact remains that our nation is facing severe energy problems. And consumers (read voters) are growing increasingly hostile with rising energy costs, both for transportation and the home.

An Energy Bill Prediction & Financial Implications

My view is that the presidential election is too contentious for any significant legislation to pass. The GOP will filibuster anything that looks like it has a shot to avoid taking stump issues away from their candidate.

And even if a comprehensive bill was passed, President Bush has said he will veto any bill that repeals taxes for the oil and gas industry.

So here's how I see it.

As I told Wealth Daily readers the other day, discussion over energy legislation, specifically regarding the solar energy investment tax credit, has reached a fever pitch.

Consumers who want lower prices at the pump think that opening up new drilling would immediately and significantly reduce prices. For that to happen, offshore drilling would have to instantly add new oil to the world markets, which it won't. Though it probably would have a negligible, short-term psychological effect on prices.

The other side of the coin is job loss and the destruction of vital industries. Not extending the renewable energy tax credits would lead to $19 billion in lost investment and over 115,000 lost jobs.

No politician wants to be responsible for that.

Not only that, I've heard from numerous CEOs, association heads, and politicians that renewing the tax credits is a priority and they won't be made to expire. Plus, Congress generally passes meaningful energy and tax legislation at the end of the year and wraps up unfinished business.

That said, I think we'll at least see an extension of the tax credits, even it's done late in the year and buried in a piece of unrelated legislation.

To be prepared, it's worth picking up some of the solar stocks that have taken a beating lately, and ride them on the way back up.

I like solar installers as the first play here. They're the ones that have the most to lose if the credits aren't extended, and their stock performance lately certainly reflects that.

When it's passed, I'd want to be in Clear Skies Solar (OTCBB: CSKH) and Akeena Solar (NASDAQ: AKNS).

I'd also look for some bargain bin solar stocks that have a solid history of performance, and could break out on positive tax credit news. Take a look at SunPower (NASDAQ: SPWR), Suntech (NYSE: STP), and the sleeper, Evergreen Solar (NASDAQ: ESLR).

My service, Alternative Energy Speculator, has already positioned a group of savvy investors to reap hefty profits when this deal goes down.

But this one event certainly isn't the only way we're making money. I've recommended three stocks to my readers in the past three weeks. They're each up, and they're poised for much more.

Check out how I'm navigating investors through these troubled waters.

Call it like you see it,

Nick

PS. It seems with all the market madness lately that the discussion about carbon markets has come to a standstill. But there's no doubt they will have an impact on the energy markets of the future. To stay on top of things, I'm heading to the U.S. Carbon Finance Forum in a few weeks. Feel free to check it out for yourself.

Solar Energy Investment Tax Credits

The buzz surrounding the extension of federal investment and production tax credits has reached a fever pitch.

And that's good news for your portfolio.

If you're not familiar with the situation, here's a one-sentence rundown:

The U.S. investment tax credit (ITC), which affects solar, and the production tax credit (PTC), which affects wind, are set to expire at the end of the year, bringing the rebate down to 10% from 30%.

If these are allowed to expire, it would mean a drastic reduction in solar and wind demand the following year. Naturally, associated solar and wind stocks would also see a reduction in value.

In fact, I would argue that worries about the tax credits' expiration have been partially to blame for the downward pressure on renewable energy stocks so far in the second half of this year.

This is a notion that the common investor has overlooked. Even some institutional buyers have shied away from these types of stocks because of uncertain guidance on the tax issue from Washington.

But I see no risk, and would actually be loading up on solar stocks right now, while they're still on the cheap. Because they won't be for long.

Tax Discussion Reaches Fever Pitch

There's honestly not a doubt in my mind that the ITC and PTC will each be extended. It may not be the eight-year extension that the renewable energy industry is looking for, but it will be extended.

When that happens, the stocks that the tax credits affect are absolutely going to fly. I'll get to that in a minute. First, let me let you in on how I know they will be extended...

With the economy in its current state, no politician is going to be held accountable for supporting legislation that will cost America jobs. And that's exactly what allowing the credit to expire would do.

That's why when the House voted to extend the credits back in May, they did so through a bill entitled "Energy and Job Creation Act of 2008." Of course, that bill didn't make it through the Senate.

A Navigant Consulting report issued earlier this year stated the expiration of the tax credits would lead to $19 billion in lost investment and over 115,000 lost jobs. Take a look:

Undoubtedly, it would lead to the loss of even more votes for incumbents' re-election campaigns. They most certainly won't let that happen.

Not only that, I've heard from numerous CEOs, association heads, and politicians that renewing the tax credits is a priority and they won't be made to expire. Plus, Congress generally passes meaningful energy and tax legislation at the end of the year.

And then there's the numerous Op-Ed pieces calling for the extension of solar and wind tax credits. Here are just a few of this week's headlines in that respect:

Preserve Clean Energy Credits
Failing to Extend Solar Tax Credit Will Hurt Nation
Dying for a Tax Break

We also have local leaders, politicians, and businesspeople calling for the extension. And each Presidential candidate claims to support it.

So I'm fairly sure it will be passed by the end of the year. Now that we know that, all that remains is deciding which stocks will benefit the most when the tax credits are extended.

Playing Energy Tax Legislation for Profit

The first group of stocks that will receive a significant bump when the tax credits are extended are solar installers.

This is the sector of the solar industry that not only makes the highest margins, but that has also been most affected by lack of an extension thus far.

Clear Skies Solar (OTCBB: CSKH) is down 67%, from $1.50 to $.50, for the year so far.

Akeena Solar (OTCBB: AKNS) is down 65% in the same time.

And the newcomer to the installer arena, Real Goods Solar (NASDAQ: RSOL), has never traded higher than $9.25, which it did in its first few days of trading back in May. It now trades at $6.00.

All of these stocks are worthy of investment ahead of significant tax legislation votes. And I believe each would gain no less than 10% on the news.

The next place to look is oversold solar stocks, of which there is an abundance. It's probably wise to target the companies that do a good portion of their business in the U.S.

Though well-established, I'm looking at companies here like SunPower (NASDAQ: SPWR), Suntech (NYSE: STP), and First Solar (NASDAQ: FSLR).

And if you're looking for utility scale solar installers, I'd be looking at SolarWorld (XETRA: SWV) and Stantec (NYSE: STN).

Beyond that, there is a slew of smaller solar manufacturers that are currently undervalued, and that will receive a nice bump when the tax credits are extended. The largest of those include Trina Solar (NYSE: TSL) and Evergreen Solar (NASDAQ: ESLR).

Indeed, with most solar stocks still trading flat on a year-to-date (YTD) basis, there are some real bargains to be had. Buying them now, at discounted prices, will surely be a boon to any portfolio as the policy landscape improves, capacities are ramped up, and costs are reduced.

Now is certainly the time to be buying. And no savvy investor knows that better than readers of the Alternative Energy Speculator, who have earned three double-digit solar gains in the past two weeks by following my advice.

If you don't want to miss the next winning recommendation, click here.

Call it like you see it,

Nick

Solar Stocks: Trends & Market Outlook

Solar stocks are completely undervalued. And big money stands to be made. The following is a current profile of the industry, along with what to expect going forward.

The Solar Industry

Let's start with the basics.

The global solar industry has grown 849% over the past eight years, from an installed capacity of 877 MW in 2000 to 8,325 MW at the end of 2007.

That breaks down to a compounded annual growth rate (CAGR) of 37.9% for the same period.

Folks, not many things grow 849% in eight years. For perspective, the Dow Jones Industrial Average gained only 12% during the same time.

Broken down by country, or by region, some interesting trends also emerge, especially when it comes to the countries with the highest growth rates for solar installations.

For example, I bet you'd never guess that the United Kingdom ranked among the top five countries for solar installation growth over the past eight years.

Here's the full list of those countries, along with their respective solar installation annual growth rates:

Spain, 73.3% CAGR
Germany, 65.3% CAGR
United Kingdom, 36.9% CAGR
Indonesia, 35.4% CAGR
Japan, 31.5% CAGR

That's the story for the past eight years. Some savvy investors made a lot of money, but it's nothing compared to what'll happen the next eight years.

Solar Stocks Outlook & Industry Forecast

Under a conservative growth scenario, the solar energy industry will grow another 39% by the end of 2009. By 2012, it will have grown over 135% from 2007 levels.

Worth noting is that the compounded annual growth slows during the period from 2007-2012, to 18.7%—down from 37.9% for the period from 2000-2007.

This is more an indication that the industry is maturing than it is an indication of slower growth. This is due to the volume of solar module being installed.

For example, 19,624 MW of solar energy capacity will be installed in 2012. Only 9,797 MW will be installed this year.

So the percentage growth of installs is slower, but the amount of panels being produced and installed is much greater. This is great news for investors.

Interestingly, the countries in which a good portion of these future panels are going to be installed is different from the countries leading the way over the past eight years.

This is due to saturating markets, policy leadership, and the price of retail electricity if different areas.

The five countries leading the way in the next five years are, along with their estimated CAGR:

China, 35.8% CAGR
Thailand, 35.7% CAGR
Indonesia, 34.9% CAGR
India, 34.3% CAGR
South Africa, 29.7% CAGR

The U.S. comes in fifth for anticipated growth over the next five years, with good opportunities also emerging in the Mediterranean basin and Australia.

Preparing for Solar Industry Growth

To get a grip of how the solar industry is playing out, it's helpful to first see who the largest players are.

Here's a chart of the top solar cell producers by market share for 2006-2007:

I will tell you, however, that Q-Cells (XETRA: QCE) has since taken over the top spot.

Sharp (TYO: 6753), Kyocera (NYSE: KYO), Sanyo (TYO: 6764), Mitsubishi, and BP Solar (NYSE: BP) cannot be invested in as pure solar plays, so I immediately dismiss them. I'm only after the pure plays here.

That leaves Motech (TAIWAN: 6244), SolarWorld (XETRA: SWV), and Suntech (NYSE: STP) if you want to play with the big boys. Schott is a special case that we'll get to in a minute.

Motech is a Taiwanese solar company that reported a record $348.5 million in revenues for the fiscal year ended June 2008, though net profit actually fell 31.9% to $2.78 million.

The company is engaged in the supply of high-quality, low-cost crystalline solar cells to Photovoltaic Industry and module manufacturers worldwide. They've signed major silicon agreements with Nitol (now partially owned by Suntech) and DC Chemical—two of the largest players in the silicon supply game.

If you trade internationally, keep an eye on them.

SolarWorld is a vertically integrated solar company based in Germany. They're involved in the entire process, from silicon production to module manufacturing. And, like Motech, they've also signed a silicon supply deal, worth $580 million, with DC Chemical.

SolarWorld has also built and opened their own silicon production plant.

But Suntech is my favorite play here. It's traded domestically, so everyone has access to it, and it's been performing beautifully. This is a company that reported a 61.6% increase in net profit from 2006 to 2007.

They boast highly efficient cells, operate across nearly all sectors of the market, and are properly position in both China, the U.S., and Australia.

Coming soon, we'll have access to Schott Solar.

The company announced plans to raise $740 million through an initial public offering last week.

No word yet on when they will list, but you can bet Green Chip International will be all over it, along with the rest of the opportunities in the international green markets.

Call it like you see it,

Nick

PS. Company and industry data and charts provided by GlobalData.

Investing in Solar Companies

I don't get it.

Solarfun (NASDAQ: SOLF) had two great announcements this morning.

First, they announced a deal to supply Q-Cells (XETRA: QCE) with 100 MW of solar modules per year, for three years—making it a 300 MW deal. The deal is in effect from 2009 through 2011.

This is huge. Q-Cells is the world's largest manufacturer of solar cells, and tipping their hat to a small Chinese manufacturer serves to validate Solarfun's position in the market.

Second, Solarfun reported stellar 2Q earnings today, beating earnings estimates by $0.13, beating revenue estimates, raising 2008 shipment guidance and tripling its second quarter profit.

The result?

Solarfun fell 10% in premarket and remained about that low throughout the day.

This is crazy.

We're talking about a company that just recently began rebuilding momentum, climbing 71% since August 11^th.

One would think that when a great company has two great announcements in one day that the stock would pop nicely.

But such is the state of the current overall market.

Similar plights have occurred with Renesola (NYSE: SOL), Canadian Solar (NASDAQ: CSIQ), and Trina Solar (NYSE: TSL).

Each had decent earnings announcements in the last few weeks, only to receive a nice bump and then head south.

Same for GT Solar (NASDAQ: SOLR).

Don't get me wrong, solar has had a nice bump lately.

But as a group, solar stocks are still in red territory for the year—a glaring indication that they are still cheap.

My advice is to seek out the cheap ones and load up. Solar stocks want to go higher. It's only a matter of time.

Of course, my service Alternative Energy Speculator is navigating a group of savvy investors through these murky waters.

Those investors have already taken good profits, and are aligning themselves for even more.

In the last few weeks we made:

17% on JA Solar (NASDAQ: JASO)
15% on Suntech Power (NYSE: STP)
16% on Yingli Green Energy (NYSE: YGE) and
80% on Solarfun Power Holdings (NASDAQ: SOLF)

Of course, those gains are long gone. But the next round is just getting started.

For full guidance on how to profit from solar stocks, all things alternative, and to become a member of this savvy group of investors, check out the Alternative Energy Speculator.

Call it like you see it,

Nick

Wind Energy Companies

I've discussed wind energy in these pages many times before, but the conversation seems to have always turned to a discussion of wind turbine stocks.

Today, I want to take a step back, look at the industry as a whole, and focus more broadly on wind energy companies.

The Wind Energy Industry

First, let's get a quick rundown of the growth of the domestic and international wind markets out of the way.

Here's the chart for wind power capacity growth by year:

As you can see, global installed capacity for wind energy has grown 482% over the last seven years, from 14,604 MW in 2000 to 84,934 MW in 2007.

Broken down further, the international wind industry has a compounded annual growth rate (CAGR or year-over-year) of 28.6%, which is impressive, to say the least.

But the past performance of the wind energy stocks is going to do little to help the future performance of your portfolio, apart from establishing an historic trend and highlighting what you've been missing.

So here's the global wind energy installed capacity forecast, going out to 2012:

This data reveals that the industry will grow 215% between 2007 and 2012, from 84,934 MW to 267,837 MW. That's a CAGR of 25.8%

Now this is information that can give your portfolio a boost. In an industry that's doubling in size every four years or less, there are surely more than a few companies worthy of investment operating within it.

The only thing left to do is to actively seek out the best ones.

To start the search, it's probably worth taking a look at the countries currently boasting the highest year-over-year growth in the wind industry. So here they are, along with their respective annual growth rates, as provided by GlobalData:

Turkey, 95.4%
Mexico, 84.7%
Brazil, 61%
China, 54%
Poland, 50.9%

Of course, those are the fastest growing markets. According to GlobalData, the largest markets by megawatt capacity are:

China, 51,200 MW
U.S, 45,454 MW
Spain, 36,715 MW
Germany, 35,829 MW
India, 25,935 MW

The only thing left to do is single out the largest operators in those areas, invest, and reap the profits.

Wind Energy Companies

Let's begin with China since that's the only country to appear in both the largest market and fastest grower categories. Per GlobalData, here are the largest wind companies operating in China that each installed more than 100 MW in 2007:

Goldwind Science and Technology (SZ: 002202)
Sinovel Windtec Co.
Gamesa Corporacion Tecnologica (MCE: GAM)
Vestas Wind Systems (CPH: VWS)
Dongfang Electric Corporation (HKSE: 1072)
GE Energy (NYSE: GE)
Suzlon Energy Limited (NSE: SUZLON)

Most of those companies trade on foreign exchanges. If you dabble in those markets, my money is on Vestas and Gamesa, with Suzlon in third. But the companies that trade in China could see significant growth as the industry continues to mature.

Vestas, for example, is getting $1,628 per kW for their turbines. The average price is $1,008 per kW.

In the U.S., which is the market most of you are probably interested in, the dynamic shifts dramatically.

Here are the largest companies operating in our domestic wind market:

GE Energy (NYSE: GE)
Vestas Wind Systems (CPH: VWS)
Siemens AG (NYSE: SI)
Gamesa Corporacion Tecnologica (MCE: GAM)
Mitsubishi Heavy Industries (TYO: 7011)
Suzlon Energy Limited (NSE: SUZLON)
Clipper Windpower (LSE: CWP)
Nordex (FRANKFURT: NDX1)

Of course, my first two picks of Vestas and Gamesa still stand, and now you can see it's because of their intense presence across multiple markets. My sleeper pick here is Nordex.

The other side of the coin is to look at the largest wind farms being erected to identify the companies involved. Here are the companies that come up when discussing the largest planned wind farms in the U.S., and around the world:

Clipper Windpower (LSE: CWP)
British Petroleum (NYSE: BP)
Naikun Wind (TSX.V: NKW)
Vattenfall AB
SUEZ (PARIS: SZE)
RWE Group (XETRA: RWE)

Naikun probably offers the lowest share price in relation to potential for that group.

A Windy Future

So that's a snapshot of the global wind industry. I think some clear winners are definitely emerging.

But there is much more to come. And some tiny companies will certainly make their mark before all is said and done.

This is because the big boys alone can't satiate the surging demand for wind energy and related products and services.

For example, through 2020 in Europe, wind is expected to account for 34% of new generating capacity. It'll account for 46% from 2020-2030.

And the goal of attaining 12-14% of Europe's power from wind by 2020 is well within reach.

Here in the U.S., an Energy Department study found that wind energy could generate 20% of U.S. electricity by 2030, as compared to today's one percent.

So there's still a lot of work and investment to come.

The companies discussed so far will certainly play a vital role in wind's growth. But a handful of companies are providing specialty parts and service that are also crucial to the industry, like transmission cables, installation services, gearboxes, and, increasingly, turbines.

As I said, this is snapshot of the industry—a very dynamic industry that's constantly changing.

While it's possible to base investment decisions on stationary data like this, it's probably wise to have constant updates and recommendations to really stay on top of things, especially since they change everyday.

With that in mind, I offer you Green Chip International and Alternative Energy Speculator.

Each of those services has taken profits on companies operating in the wind sector. But it's not by just recommending the companies with the highest revenues or most installed megawatts.

It's by taking a nuanced approach, including policy and geopolitical contexts.

That's exactly what these publications do, and they've taken winner after winner.

I encourage you to learn more about the profit opportunities associated with each pub by following these links to the Alternative Energy Speculator and Green Chip International.

Call it like you see it,

Nick

Water Investments

The other day I was chatting with my father about the current happenings in my hometown of Elkton, Maryland.

And, as with other similar conversations I've had with him, I couldn't help but notice the parallels between what's going on in Podunk and how I see the broader markets playing out.

Essentially, what I heard from my dad—and later validated with my own research—is a confirmation of the things I've been saying about the water industry for over a year now.

Here's an excerpt from a water investments report I wrote back in June of 2007:

To date, water and sewer bills, taxes, and private business foot the cost for most of the funds needed to build, operate, and maintain water and wastewater systems.

But those sources alone are not meeting the total current amount needed, let alone the increase that will be needed in coming years.

To meet future funding requirements, private firms in the industry will have to play a key role. The pressure of a competitive market, coupled with the introduction of new technology, will help ease the pain of an emerging funding gap.

Because right now the majority of water utilities are owned by states and municipalities, to help generate more funding, many of these utilities are going public. So much so that Lehman Brothers believes the number of people served globally by investor-owned water companies is expected to rise 500% over the next 10 years.

With the amount of money that has to come to this sector, investment opportunities will surely abound.

Water: Its Going Away is Not Going Away

A company I mentioned in that water report, Calgon Carbon Corporation (NYSE: CCC), was trading just below $10 per share at the time.

Today?

That stock is trading for $19.31—nearly double its level of just 14 months ago.

This is because, as I've said numerous times, the water issue is not going away. There is a finite supply of freshwater that is no longer enough to support the simultaneous rise of population and demand.

Much like oil, it's getting harder and harder to get easily accessible freshwater because aquifer levels are falling. And, due to the disappearance of polar icecaps, the supply of ice melt water that many countries and western states depend on is dwindling each year.

So we have to conserve water, reuse and treat more of the water we use, find new freshwater supplies, and increasingly employ desalination technology.

The companies that provide those services are going to make a killing. And you can profit right alongside them.

But back to my original thesis of the privatization of municipally owned water services. . .

The information my father passed on is the stuff you can only learn by reading a daily small-time newspaper.

Apparently, the Board of County Commissioners of Cecil County made a quick decision to privatize a portion of the county's water service once provided in-house.

Here's a part of the release from the Cecil County Government Website:

The Board of County Commissioners of Cecil County (BOCC) is pleased to announce the introduction of two agreements relating to the grant of a franchise to Artesian Water Maryland, Inc. /Artesian Wastewater Maryland, Inc., to provide water and wastewater service to the Elkton West franchise area. This endeavor is in response to action taken by the Board of County Commissioners on December 18, 2007. At the BOCC meeting on December 18, 2007, the recommendation of the Elkton West review committee was presented to the Board with respect to whom the county would engage in negotiations for the award of a franchise agreement for water and wastewater systems within the Elkton West service area, as contemplated in the request for proposals.

One can assume that this is due to growth in the county, including the addition of several large new communities, spurred by Cecil County's convenient location in the corridor between Philadelphia and Baltimore and by a Defense Base Closure and Realignment Commission (BRAC) action that will bring over 100,000 new employees to Aberdeen Proving Ground.

Presumably, the county's resources aren't enough to handle the current and coming growth.

Water Investments: Never Pay a Water Bill Again

My father, understandably, was weary of the news. A private water company would surely bring higher prices than the artificially deflated prices of a public utility.

Indeed, this is a precarious situation. Inflation is weighing on everyone, and nobody I know wants to pay more for anything.

Yet the fact remains, water is the world's most precious resource. We need it to survive. The laws of supply and demand always prevail, and limited supply coupled with surging demand has to lead to higher prices.

But I told him not to worry.

You can actually offset these rising costs, and even turn a profit in spite of them.

You see, the company being awarded the contract from Cecil County is Artesian Resources Group (NASDAQ: ARTNA), a publicly traded distributor and seller of water to residential, commercial, industrial, governmental, municipal, and utility customers.

Incidentally, this company made inroads to Cecil County earlier this year by purchasing the Mountain Hill Water Company, which included an 8,000 acre service area, a water treatment facility, four wells with a capacity of up to 500,000 gallons per day, a 500,000-gallon elevated storage tank and approximately 8 miles of main located at the core of the county's growth area between North East and Perryville.

Before the acquisition, Artesian provided engineering and operations services to Mountain Hill during 2006 and early 2007, including the construction of a new water treatment plant.

By buying shares of Artesian, residents of Cecil County can effectively offset any potential rise in water costs. This is because any additional revenue garnered from Cecil residents will show up on the company's balance sheet, ultimately being reflected in the stock's valuation.

What's more, Artesian—and most other water utilities—pays a hefty dividend. In June, the company announced a quarterly dividend of $0.1784 per share.

So, if you hold 200 shares and get the quarterly dividend four times, you're looking at dividend income of about $143 per year, which should be plenty to offset any rise in your water bill.

Of course, you're still out the money you ponied up to buy the shares, but held long-term, you'll see an increase in that investment as well.

It's win win.

Keep this in mind as water utilities in your area are privatized, and you'll never actually have to pay a water bill again.

Call it like you see it,

Nick

PS. This is just one of the strategies being employed by the Alternative Energy Speculator to take profits from the rapid growth of the alternative energy and water industries. And we're doing just that. . . the portfolio currently boasts 8 double-digit winners with an additional 5 in the green. If you want to offset rising water and energy costs or simply make boatloads of energy profits, you have be part of this elite group of investors. Take a minute to read about another of the winning strategies being used by the Alternative Energy Speculator.

Solar Earnings

Suntech's (NYSE: STP) second quarter 2008 earnings came out this morning. And boy were they impressive.

Net income for the quarter came in at $65.2 million, or $0.38 per share. Analysts had predicted earnings of $0.32 per share.

That income is nearly $24 million better than the sum in the same quarter of 2007—a 58% rise!

Revenue was $480.2 million, a full $40 to $50 million better than even Suntech's own estimate.

The solar stalwart raised its third quarter revenue forecast, saying it expects $570 million to $580 million.

Suntech also raised its full-year revenue forecast to a range of $2.05 billion to $2.15 billion, up from an earlier estimate of $1.9 billion to $2.1 billion.

Guidance for shipped panels pointed to solar modules totaling about 550 megawatts of power this year, up from 530 million.

And, according to the AP, "[Suntech's] production capacity increased to 660 megawatts during the quarter — up 120 megawatts over the last three months — and the company plans to reach 1 gigawatt in capacity by the end of the year."

I've talked before about how important reaching the "one gigawatt club" is among solar's top producers. It is truly a symbol of status and of industry dominance.

Suntech said selling price increases, sustained demand, and the strength of the Euro over the dollar were among the reasons for their stellar performance.

Of course, all this is on the heels of ReneSola's (NYSE: SOL) recent announcement of comparable impressive numbers for the quarter.

According to Reuters, ReneSola "quadrupled its second-quarter net income from a year ago, helped by a rising number of customers and strong demand, the company reported on Tuesday. Net income jumped to $23.3 million in the quarter to the end of June from $5.9 million a year ago."

Quadrupled!

Trina (NYSE: TSL:) also had good earnings recently.

Indeed, the solar bull may be back. At the very least, it may be worth picking up a few shares of the companies reporting good earnings while they're still on the cheap.

Remember, solar stocks are down an average of 40% this year—a complete oversold situation if you ask me.

They have a lot of ground to make up. And a lot higher to go after that!

Call it like you see it,

Nick

PS. I got my Alternative Energy Speculator readers into a few solar plays well before earnings season came around. Those guys and gals are now sitting on 7 double-digit winners. If you want this tye of analysis early and often, so you can make ridiculous profits in the alternative energy sector, you have to be part of the group. There's simply too much money changing hands not to making some for yourself.

Clean Energy Stocks

Mary Sawaya has seen a 50% increase in business over the past five years.

She sells work boots and Carhartt overalls in Kemmerer, Wyoming.

But the work boot market hasn't always been so bullish.

According to Sawaya, "About 10 years ago, [the energy industry] was in a slump. And then when Williams Field built their second plant and [Enterprise Products Partners LP] came in, and all this oil and gas cycling came through ... our business went way up."

Job growth in Wyoming has been the strongest in the nation over the past few months. The state's budget surplus is a whopping $571 million.

A recent local news report claimed the state and its citizens have benefited from the sale of coal, oil, and natural gas. But, the report claimed, "Natural gas has really been the biggest money maker in the past couple of years. It's boosted the whole state, but especially the towns that are really close to the energy fields."

Notice she didn't say oil fields.

Before I get into the clean energy stocks associated with this energy boom, let's take a look at some of the market forces behind the push...

Natural Gas: The New Transportation Fuel

No, it's not oil that's fueling this modern day boomtown—it's natural gas.

You see, many of the world's largest oil fields, including those from which the U.S. gets large amounts of imports, are in decline. This is a fact that is not going away. In fact, Cantarell, Mexico's supergiant and a large source of American imports, declined 28% last year. At that rate, it will be gone in four years.

To make up for this (and many other) declining fields, energy (not oil) companies are racing to pick up the slack. Indeed, we really can't produce any new additional oil until we find and produce enough to offset the decline of major fields.

So everything is on the table. Biofuels, tar sands, oil shale, deepwater, and yes, even natural gas liquids. We need them all. And we need them to be recovered responsibly.

This is what The Pickens Energy Plan is all about. Using our domestic supply of natural gas—like the fields in Wyoming—to increasingly fuel our cars. Some of the electricity that was once produced with large amounts of natural gas will then be shifted to cleaner wind-based power.

This all comes down to energy security and independence. Importing 66% of all oil and oil-based refined products makes no sense at all (and hasn't for a long time).

But, as I've said before, Boone's efforts aren't entirely selfless. The billionaire, who currently serves as chair of BP Capital, has large claims in clean energy, natural gas- and wind-related companies and projects.

He's got a $12 billion stake to build what, until recently, was considered to be the world's largest wind farm on the Texas panhandle (Clipper and BP recently announced a wind farm that would be even bigger). Pickens also has heady interests in natural gas fueling companies and in natural gas engine manufacturers.

And with the amount of financial weight he brings to the energy party, you can bet policymakers are responding.

California has already set forth a ballot initiative that would allow the state to invest in the burgeoning market for natural gas-fueled cars and trucks. The measure, which currently faces no opposition, would free up $5 billion to fast-track the deployment of a million natural gas vehicles on California's roads.

The presidential candidates, for their part, are each taking meetings with energy guru.

If you like the plan or hate it, it's fair to say we're going to see a bump in the nation's use of wind energy and natural gas as a vehicle fuel.

Clean Energy Stocks: From Wyoming to Your Portfolio

Earlier in the article we discussed the effects the natural gas boom is already having in small Wyoming towns. That's because Wyoming is a hotbed of liquefied natural gas activity.

The associated economic benefits of the increased use of natural gas aren't being monopolized by Wyoming's citizens. Liquefied natural gas specialists operating in the area, like Enterprise Products Partners (NYSE: EPD) and Williams Partners (NYSE: WPZ) will also see a nice bump.

But the companies that stand to make the most financial gain are those providing liquefied natural gas and natural gas engines to the end market.

T. Boone himself has 40% claims in companies that operate in those sectors.

And you should have your claim, too.

The liquefied natural gas and engine companies in which T. Boone is invested have returned 10% and 107% respectively over the pat year.

And that was before the Pickens Plan and huge natural gas bull market came into play.

I've prepared a full report on how you can instantly start profiting alongside billionaire oilman T. Boone Pickens.

Those that have followed his lead over the past few years have made millions. And you should be getting your fair share.

Call it like you see it,

Nick

Chevy Volt

The buzz surrounding the Chevy Volt is increasingly overwhelming. An overview and update is certainly in order.

It was only five years ago when General Motors product chief Bob Lutz said that hybrid cars don't make "economic or environmental sense."

Since then, the market and the science has proven him absolutely wrong. Prius sales are off the charts and every major automaker is now playing the hybrid game, albeit with different results.

Before announcing the Chevy Volt at the 2007 Detroit Auto Show, General Motors definitely took its lumps, failing with both Saturn hybrid knock-offs and with trying to implement hybrid systems on large gas-guzzlers like SUVs and trucks.

Failing and desperate, executives rolled out the Chevy Volt—an impressive piece of machinery until you look at the numbers.

Originally well-received by all parties, the Volt now looks as though it'll come with a price tag twice as high as its competitors. Some are even saying it could lose money for GM, which has been posting billions in annual losses for years.

And there are battery issues. Oh, are there battery issues.

So the question remains: Is the Chevy Volt just a very expensive public relations campaign.

Chevy Volt: Is There Something Better?

According to John McCain, there isn't. He recently told a group of GM workers that "The eyes of the world are now on the Volt. It's the future of America and the world."

I guess he hasn't heard of UQM, Tesla, Phoenix Motorcars, Aptera, or Toyota, for that matter.

Yet, the promises have been made. When first announced, the Chevy Volt was rumored to cost $25,000. Then GM was hinting at $30,000.

Now, Lutz says that $40,000 might be possible, but that $48,000 is more realistic. It's beginning to look like a moronic auction.

Do I hear $50,000? $55,000?

The battery alone is projected to cost $10,000 per vehicle, which will be outsourced to either LG of Korea or Continental AG (XETRA: CON). GM's decision will be announced shortly.

Whichever battery pack is chosen, it will ultimately become a part of GM's proprietary E-Flex hybrid powertrain. The Volt will use batteries to power the car up to 40 miles a day without recharching. When the electric battery needs to be recharged, the E-Flex Drive System—complete with a small internal combustion engine—kicks in and recharges the lithium ion battery pack while powering the vehicle.

Don't get me wrong, this is a very novel concept. Kudos to GM if they can pull it off.

But the fact remains, the Toyota Prius commands a 51% share of the domestic hybrid market. And its already an established consumer vehicle, in many cases delivering in excess of 50 miles per gallon. The Civic hybrid is also very impressive. And so are the larger hybrid models, like Camry and Accord.

Cracking that market share will be a tough row to hoe for General Motors what with them being so late to the game.

Some manufacturers, like Phoenix Motorcars, Tesla, and Aptera have foregone hybrids altogether in pursuit of all electric vehicles. All three of those companies have successfully manufactured vehicles that run entirely on electricity.

Hybrid Investment Opportunities

If the Chevy Volt is a less-than-stellar consumer option, then GM (NYSE: GM) certainly isn't a pure play hybrid investment outlet.

Tesla, which is currently manufacturing the 220 mile per charge Roadster and has plans for sedan, was rumored to be going public this year.

And while the company has formally acknowledged its intent to do so, unfavorable market conditions have prevented it thus far. When it does come to market though, be ready to buy.

But you can still invest in electric vehicle technology. Both Altair Nanotechnologies (NASDAQ: ALTI) and UQM Technologies (AMEX: UQM) are supplying battery parts to Phoenix Motorcars for their SUT, an all electric truck that gets over 100 miles per charge.

And A123 Systems Inc., which has battery deals with GM, Think, and BAE Systems just recently filed for a much anticipated $175 million IPO. I'd be all over that one as soon as it lists.

There are plenty of other up-and-coming hybrid, electric vehicle, and battery plays out there. Only time will tell which will be successful.

In addition to companies manufacturing vehicles, there will be a massive investment opportunity in companies that will be modify our grid to support increasing amounts of electric vehicles.

My service, Alternative Energy Speculator, will guide you on how to profit from this transportation renaissance.

Until next time,

Nick

The Renewable Energy Markets

Has green lost its luster?

Of course not. Yet that seems to be the attitude of more than a few.

Sure, solar stocks have been battered over the past few months. But didn't the Dow (Index: DJI) go from over 13,000 to below 11,000 in the same time? Indeed, it did.

And hasn't Exxon Mobile (NYSE: XOM) gone from nearly $95 to to about $75 in the same time? Indeed, it has.

Even the incessantly-talked-about Transocean (NYSE: RIG) is down 15%. . . in just the past two months.

So for renewables to be dismissed as bad investments by bulls of other energy sectors is not only wrong, it's quite hypocritical.

Indeed, with the world's largest oil fields being depleted—some by as much as 15% per year—and natural gas facing a similar long-term plight, we're going to need all the energy we can get. And there's plenty of money in all of it.

But you must realize, new oil discoveries, and even arctic and offshore drilling, are certainly no catholic cure. In fact, the amount of oil they're providing—and could potentially provide—is absolutely not enough to offset rising demand and oil field depletion, not to mention that oil is increasingly more expensive to extract. This is an often overlooked aspect of new oil finds.

Yes, there's money to be made from the remaining oil and the companies that refine the ever more heavy and sour crude. And I'm not against making that money.

But to think that there will be no serious energy transition to include a large share of renewables coupled with efficiency is naïve at best, and moronic at worst.

That said, let's look at the billions of dollars that continue to pour into the green sector even during this progressively bearish market.

Renewable Energy Markets: Investment Magnet

According to New Energy Finance, one of the world's most highly respected renewables analytics firms, private equity and venture capital deals in cleantech surged to a record $5.8 billion in the second quarter.

If the technology had no future, would it be bringing in record investment dollars at the most foundational levels? Hardly. Surely you can remember the internet naysayers of the 1990s. And look how that turned out. . . you're reading this on the internet, and it's marvelous.

These green technologies that are being invested in today on a very nascent level are going to be the energy juggernauts of the future. From my perch, it's inevitable.

But back to that second quarter $5.8 billion investment, which, by the way, is more than double the $2.6 billion invested in the first quarter.

You know where that money went: wind, solar, and second generation biofuels.

And speaking of oil companies and second generation biofuels, check out where BP (NYSE: BP) thinks transportation fuels are headed. On Wednesday, they announced a $90 million partnership with Verenium (NASDAQ: VRNM), to speed the development of cellulosic ethanol.

Verenium shot up over 75% on the news. . . in two days.

More affirmation of the ethanol market came this week when the EPA decided to uphold the increased Renewable Fuel Standard (RFS) signed into law last December, which increases the amount of renewable transportation fuels used annually to 36 billion gallons by 2020—16 of which must be cellulosic ethanol.

Texas Governor Rick Perry had requested that the EPA cut the RFS mandate by 50%. He lost.

Back to green energy investment. . .

Beyond second generation biofuels, wind and utility-scale solar continue to be hotbeds of investment. According to a recent Wall Street Journal Environmental Capital posting:

Wind energy in the U.S. is still going strong, despite the lingering uncertainty over congressional extension of tax credits for clean energy. The American Wind Energy Association today said second-quarter wind-power installations fell slightly from the first quarter, to 1,194 megawatts. But the wind lobby said 2008 should be another record year overall, with more than 7,500 megawatts installed, provided Congress finally renews the tax credits.

Power companies in the U.S. and Europe are increasingly looking to new types of solar power for big clean-energy installations, rather than do-it-yourself rooftop arrays. Biofuels have gotten a bad rap, but the next generation-made from stuff you can't eat like waste wood and algae-is drawing multi-million dollar investments.

We now know that pre-public cleantech companies are still attracting gobs of investment.

So what's the problem with publicly traded companies?

Publicly Traded Renewable Energy Companies

Part of the problem stems from the fact that renewable energy companies are finding increased resistance to listing publicly. This is do to instability in the overall equity markets fueled by a credit crunch, a mortgage mess, and a weak dollar.

That precarious situation has shelved several cleantech IPOs, making it harder for early-stage investors to recoup their investments.

Even though companies raised $5.2 billion in public markets during the second quarter, over half of that came from just one listing: Portugal's EDP Renovaveis.

Nonetheless, that $5.2 billion was monstrous jump over the dejected $1 billion during the first quarter—a sign that conditions may be starting to improve.

Until conditions completely improve for new entrants, one must embrace the current culture of the market.

There are plenty of bargains to be had in these troubled waters. Great companies, across all renewable sectors, have been beaten down as a function of broader market conditions.

Chinese solar companies, for example, are painfully oversold. And their rebound to levels of old will certainly provide gains congruous with the amount of of their recent losses—about 46%, on average.

I'm talking about companies here like JA Solar (NASDAQ: JASO), Solarfun (NASDAQ: SOLF) and Yingli (NYSE: YGE).

The same holds true for other renewable sectors.

Indeed, the bull market in energy is long from over. In fact, we're just in the first inning. The downturn in energy stocks due to negative external conditions is only a bump along the way.

As long as demand continues to rise exponentially—and we all know it will—then the energy, and particularly the renewable energy, bull market is destined to press on.

Call it like you see it,

Nick

P.S. My Alternative Energy Speculator continues to make money in this difficult time. By employing a strategy that consistently uncovers oversold and underloved cleantech stocks, readers of that publication are sitting on no less than six double digit winners. Check out just one of the recent opportunities.

Water Company Stocks

There is a giant bull market that hardly anyone knows about.

It has people grappling for a scarce resource. It has businesses fighting for rights to it. It has pitted neighbor against neighbor, and state against state.

And it could make you an absolute fortune.

Of course, being such a huge bull market, there are examples of it everywhere—in the headlines and news stories you read everyday.

Yet nobody seems to put the pieces together; no one has yet connected the dots in a meaningful way for investors.

Take, for example, an article I came across recently in the Los Angeles Times:

Across the countryside of this nation on the heel of the Arabian Peninsula, the pumps and drills roar. Wildcatters bore as much as 1,000 feet into the earth and draw out the valuable liquid. They pump it into tankers and haul it away to sell to the highest bidder.

Any rational person would assume this article was about oil. But it's not.

It's about water. The world's most precious resource.

Water Scarcity

That L.A. Times article was about Yemen, and its current struggle to provide enough water to satisfy both its population and its agricultural business. It's a task that's proving to be harder and harder each day.

The article continued:

As Yemen's exploding population draws out more and more water from the parched land. . . the bone-dry nation's very existence is threatened. The country faces its greatest water crisis, with underground levels dropping dramatically, scientists and government officials say.

Instead of conserving water as it becomes scarcer and more precious, more and more Yemenis are rushing faster and faster to extract it from the earth and capture it from rains for profit, pushing the country toward an ecological nightmare.

Interestingly, this is the same scenario that's currently being played out with oil or, more specifically, peak oil. So it begs the question: Are we about to face peak water?

More and more, the answer is yes. You see, the Yemeni water problem isn't an isolated event. It's one being witnessed by most countries in the world, both developed and undeveloped.

Certainly you've heard about the ongoing droughts in the American Southeast and Southwest, and in Australia, China, Africa, and the rest of the Middle East.

The Growing Water Problem Is A Factor of Many Issues

First of all, water is a finite resource. There is no more water on the earth today than there was hundreds of millions of years ago. There is no less either. We can't make it or destroy it.

And while our planet may be over 70% covered with water, less than 2% of it is freshwater. . . you know, the stuff we need to survive.

Of that tiny 2%, some water is perpetually tied up as atmospheric moisture or as frozen saturated soil (permafrost) that we can never use. Put another way, if all the world's water were in a one-gallon jug, fresh water wouldn't account for even a teaspoon of it!

The second part of the problem is the growing human population.

Water was first formed about 4.5 billion years ago. We've been around for only 60,000 years. But in that time, our population has exploded.

And we've done it rather quickly. It took us all of history to break the 1 billion population barrier at the beginning of the 19^th century. Since then, the world's population has grown exponentially to over 6.5 billion. We now add about 75 people every 30 seconds.

And most projections put world population at about 10 billion by 2050. That's unsustainable to say the least, unless we can come up with market-based approaches to lessen water consumption, use water more efficiently, and derive freshwater from saltwater resources via desalination, which is currently a very capital and energy intensive process.

If nothing is done, by 2025 nearly two-thirds of the world's population will be water stressed due to greater demands on freshwater resources by burgeoning human populations...the diminishing quality of existing water resources because of pollution...and the additional requirements of servicing our industrial and agricultural growth.

That's less than 20 years away.

Water Right Now: Shortages and Investing

Ironically, two-thirds of the world's population lives in areas that receive only one-quarter of the world's annual rainfall, while the most water-rich areas of the world, such as the Amazon and Congo River Basins, are sparsely populated.

Right now, about 450 million people in 29 countries are facing severe water shortages.

According to the UN, water and sanitation deficits affect about 50 percent of all people in the developing world and lead to the deaths of 1.8 million children each year.

Much like easily accessible oil, all the readily available water resources are in full use:

All surface and ground freshwater resources in Jordan, Israel, the West Bank, Gaza, Cyprus, Malta and the Arabian Peninsula are fully used.
It's now possible to wade across Lake Chad—which was once one of the largest lakes in the world and thought to be the source of the Nile.
Once the fourth largest lake in the world, the Aral Sea's surface area has shrunk by 60% and its volume by 80%. . . and it's still shrinking.
The Yangtze, Ganges, and Colorado, don't flow to the sea for much of the year because of upstream withdrawals.
In some places, the Ogallala—which supports America's breadbasket—is declining at the rate of five feet per year. Optimistic predictions say that the Ogallala will be depleted by 2020.

Perhaps an image of the current drought conditions here in the U.S. can give more tangible insight as to just how severe the problem currently is:

I could go on and on about the doom side of the water story. There is more than enough solid information and analysis to convince any sane person that there is real problem going on.

What's more interesting for investors, though, is that there's a boatload of money to be made from investing in the companies that are providing solutions to water scarcity issue.

Take, for example, the current state of the water infrastructure here in the U.S.

The nation has 800,000 miles of water pipes and 500,000 miles of sewer pipes. Generally, these pipes are supposed to last fifty years. The most comprehensive research to date suggests that the average age of water infrastructure pipes in the US is 43 years.

Just this single piece of data implies that nearly the entire water pipeline system in the US will soon have to be replaced.

To overcome these obstacles, an investment upwards of $1 trillion will need to be made in the next twenty years. That breaks down to over a 150% annual increase over current spending amounts of $60 billion annually.

Water Company Stocks

Essentially, this is a massive wealth building opportunity. By staking your claim early in the water utilities, pipe and valve manufacturers, and desalination companies that will be providing lifeblood to billions of people, you have the chance to rake in hefty profits.

Just this week Mueller Water Products (NYSE: MWA), which makes water infrastructure and flow control equipment , announced its third quarter results. The result was net income of $20.3 million, much better than the $1.3 million loss in the third quarter of 2007.

Net sales from their U.S. Pipe segment surged 9.4% higher than the same quarter in 2007—a prime illustration of the infrastructure work currently underway.

Since the announcement of the results, Mueller's stock has gained as much as 25%. And there's probably more to come.

But Mueller certainly isn't an isolated incident. I expect this trend to continue for year. This is just the beginning.

Just look at Flowserve Corp. (NYSE: FLS), which develops, manufactures, and sells precision-engineered flow control equipment. That stock has been on an absolute tear over the past twelve months:

And I have a water pipe replacement play in the Alternative Energy Speculator portfolio that is already delivering hefty gains to readers.

Indeed, there is much more to come from this sector. I'll keep you up do date here in the pages of Wealth Daily, and I'll continue making water-related recommendations in the Alternative Energy Speculator.

Call it like you see it,

Nick

Wind Turbine Stocks

Blackstone, one of the largest U.S. private equity firms, recently announced it's lobbing over $1.5 billion at a German offshore wind farm.

And they're not doing it because they feel all warm and fuzzy inside. They're doing it to turn a profit. And you should be heeding their advice.

But the wind farm, which would supply power to more that half a million homes, will need to overcome supply and labor bottlenecks in order to be a success.

You see, renewable energy is in such high demand that it is sometimes difficult to procure labor and materials. And if you've been following oil prices, you know exactly what happens when demand is high and supply is low: prices rise.

That's precisely what's happening in the wind industry. Materials like turbines and gears are in short supply, requiring long lead times, but the offshore wind industry is forecast to grow at 50% annually for at least the next five years.

And the onshore wind industry is forecast to grow just as quickly. Europe has a goal of attaining 12-14% of its power from wind by 2020. On this side of the pond, the DoE has said that getting 20% of our power from wind by 2030 is also within reach—but it will take trillions of investment dollars, considering we currently get less than one percent of our electricity from wind.

Backlogs are growing quickly, while the orders keep pouring in. It's shaping up to be giant bull market for wind turbine stocks.

The Largest Wind Turbine Companies

First, let me clarify that the turbines used for offshore wind are of different quality and cost than those used onshore. Right now, General Electric (NYSE: GE) and Siemens AG (NYSE: SI) are the two most viable candidates in the offshore business. But a few analysts have claimed that Siemens is the only company currently capable of accepting large new orders for offshore turbines—another indication of a looming, if not present, wind turbine supply crunch.

Nonetheless, each of those companies is a leader in the overarching wind turbine business. And there are other companies worth paying attention to. So let's dissect the wind turbine business, one company at a time.

The race to become the world's largest manufacturer of wind turbines is highly contentious, with a handful of companies vying for the top spot.

By nearly all estimates, Danish wind company Vestas (CPH: VWS) (Pink: VWDRY) holds the largest market share with about 23%. In fact, the company produced enough turbines in 2007 to power about 4.5 million homes, and has already made deliveries of wind turbines capable of producing 4.5 GW of power to 28 countries.

Spain's Gamesa (MCE: GAM) (Pink: GCTAF) is next in line, with a 16% global market share. Gamesa also perfectly illustrates the current backlog of wind turbines worldwide. In 2007, for example, the company sold enough contracts to to max out its production capacity. . . for the next two and a half years!

The wind turbine business is so hot that Gamesa—once a diversified renewable energy company—recently sold off its solar segment to devote more time and energy to its wind business.

Just in the past 18 months, Gamesa has built four wind turbine production facilities in the U.S., three in China, and two in Spain. So you can see how manufacturers are racing just to keep pace with demand.

The third largest wind turbine manufacturer is India's Suzlon Energy Limited (Bombay: 532667), with a 14% global market share, depending on the source.

Suzlon has been highly successful since 2005, with its revenues and profits growing by an average 100% each year. Interesting to note is that the percentage increase in profits has been greater than the increase in revenues, illustrating the company's ability to lower costs and increase margins.

General Electric comes in fourth on the list of wind turbine companies by market share, with about 15.5%. In the first quarter of 2008, GE sold $1.8 billion worth of wind turbines, which is 40% higher than the previous quarter.

What's more, the company's backlog of wind turbines has grown to $12 billion, up from $11 billion in the fourth quarter of 2007, and more than double the backlog in the first quarter of 2007.

If you're still counting, Siemens comes in fifth, with an 8-9% market share.

But enough about companies, what we're really interested in is. . .

The Wind Turbine Stocks To Invest In

Without divulging all the secrets of Green Chip International and the Alternative Energy Speculator, the two no-brainer wind turbine investments right now are Vestas and Gamesa.

Vestas has been able to boost its earnings at a terrific pace, rising from 201 million euros in 2006 to 443 million euros in 2007—a 120% increase!

And in its fiscal year 2007 earnings announcement, the group said it anticipates international wind power capacity to increase by 20% to 25% each year for the next decade.

To be honest, the company reported lower than expected first quarter 2008 results, and the share price has reflected that of late.

Vestas's second quarter earnings come out on August 12, 2008. Estimates are claiming the company will report 1.1 billion euro in revenue and .42 eurocents per share profit.

While I'm certainly bullish on this company, I (and Piper Jaffray) think they'll miss the estimates slightly to the downside. Best advise: wait for the earnings to come out. If they miss, and I think they will, you'll be able to pick up shares on the cheap after it takes a hit.

The third and fourth quarter numbers will be stellar.

Gamesa, for its part, is an utterly undervalued stock play. The company recently announced first half (H1) earnings of nearly 1.9 billion euros, about 9% higher than analyst estimates.

As a result, many analysts have upped their estimates for for full year revenue and earnings. Most agree that the second half will much more impressive than the first—as is the case with Vestas.

Plus, the fact that Gamesa has an orderbook that extends through 2011 means that investors have clear earnings visibility. And the company recently secured its first order in China since 2006.

I think this wind turbine stock could reveal a 25% upside by the end of the year.

Green Chip International

Much of the information in the latter half of this article is the type of information we normally reserve for our paid subscribers.

But this is an unusual time.

You see, we're about to officially launch our newest service, Green Chip International. In fact, it officially opens tomorrow.

As avid readers of the Green Chip Review, I wanted to give you a first-hand account of the level of analysis provided in Green Chip International.

Basically, we've looked at the best renewable energy companies in the world, and whittled them down into a blockbuster portfolio—the true 'Green Chips' of the international renewable community.

We think it's going to be so successful that we're guaranteeing six double digit gains during your first 12 months, or it's free. It's that simple.

So if you liked the analysis of the wind turbine companies above, or if you want a piece of the $114 billion international renewable energy market, then Green Chip International is just for you.

Take a few minutes to read all about it.

Call it like you see it,

Nick

Green Mergers and Acquisitions

In "Clean Energy Trends 2007," the Clean Edge authors cite "a number of developments [that] put clean energy definitively on the map over the past year."

One of those developments, they said, was "significant corporate investments in clean energy acquisitions."

Of course, we and our readers know that better than anyone.

Over two years ago, in May of 2006, Jeff had the following to say about a tiny desalination company:

In fact, one company I've been following for awhile, Zenon Environmental, Inc. (ZEN.TO) is the perfect example of just how lucrative this segment is.

Zenon is a leader in drinking water treatment, wastewater treatment, process water treatment and water recycling.

As these smaller, publicly-traded water conservation and water recycling companies continue to grow and land more and more contracts. . . behemoths like GE will continue to swallow them up...allowing those who get in early to exploit these acquisitions for profits.

You may not know the Zenon story. But the company was sold to GE for a 55% premium on its share price at the time. The stock soared 53% overnight. And those who were in earlier made significantly more than that.

Another example of shareholders taking advantage of the sale of a company occurred one year ago, almost to the day.

At the time, I was covering a company called Cambridge Display, an organic photovoltaic spin-off company that originated at Cambridge University. It was trading on the NASDAQ under the symbol OLED.

On July 30^th 2007, the company announced its sale to Sumitomo Chemical Company, for a 107% premium on the current share price. Needless to say, shareholders made at least that much on the next trading day. More if they were in earlier.

Take a look:

An Atmosphere of Green Mergers and Acquisitions

It couldn't be any easier to convey how ripe the current market environment is for corporate green mergers and acquisitions.

According to Global Trends in Sustainable Energy Investment 2008, put out by the highly respected New Energy Finance, "Corporate M&A surged forward, more than doubling from $3.5 billion in Q1 2007 to $7.7 billion in Q1 2008."

And the total dollar amount for green M&A surged to $25.7 billion in 2007, a full 52% higher than the $16.9 billion that changed hands in 2006.

Also according to that report:

Wind led M&A activity as supply chain shortages drove consolidation amongst component manufacturers, while offshore wind projects saw increased interest. Wind assets are gradually being transferred from developers to utilities.
Energy Efficiency M&A was also strong with $4 billion changing hands boosted by a few large deals.
Biofuels M&A was driven by industry turmoil, which shook out weaker players, as well as by the rising cost of building new plants, leading developers to acquire existing ones.
The U.S. and Europe dominated M&A activity, while Brazilian biofuels became a focus for non-OECD transactions.
In 2008, M&A increased in Q! As the credit crunch sparked market consolidation

Just take a look at how M&A has increased over the past seven years:

Don't you think it's about time you got a piece of this action?

Getting a Piece of Green Mergers & Acquisitions

Last year, the number of green merger and acquisition deals totaled 237, 52 more than the 185 in 2006.

And that number is only going to grow over the next few years.

You see, the current climate of green energy markets is one that's perfect for M&A on many fronts.

First of all, these are rapidly maturing markets. Take the solar market, for example.

A fledgling market just a few years ago, solar is now one of the big boys of clean energy. The market encompasses a growing number of technologies, for which costs are falling and output numbers rising.

As solar continually marches toward grid parity, the price at which it's competitive with traditional energy sources, some clear winners are emerging.

The companies that are taking the lead—the First Solars and Q-Cells of the world—are looking to buyout their competitors and other, smaller operations. Expect this phenomenon to continue with other sectors of renewable energy as well.

But that's just one way that M&A is initiated.

Because renewable energy is such a fast-growing and profitable business, large companies that aren't currently getting a piece of the action are looking to get a foot in the door.

In fact, most pure-play clean energy acquisitions in 2007 were driven by buyers wanting to expand into the renewable energy industry via power generation or equipment manufacturing. According to the above referenced report, with regard to companies expanding into the renewable energy business, "a total of $10.9 billion was invested in renewable power companies, an increase of 83% on 2006, while $7.6 billion was paid for clean energy equipment manufacturing firms, up 44% on the previous year."

Now, I'm not saying that every small renewable energy company is a buyout target. But if you find one with the right attributes, operating in the right sector, the chance grows exponentially higher.

That's partly why we founded the Alternative Energy Speculator (AES)—to find young, undervalued companies that have either the potential for massive gains or acquisition.

It just so happens that the latter occurred this week.

One of the companies in the AES portfolio, Xantrex Technology (TSX: XTX), announced it is being purchased by Schneider Electric, for 55% higher than their average share price over the last 30 days.

Of course, the stock skyrocketed by that amount in just a few short days, and I gave the sell notice for Alternative Energy Speculator members to cash out with handsome gains. Take a look:

I don't want you to miss the next opportunity like that.

With that in mind, please read the attached report. It has all the details on a stock we think could gain 353% in the next two years. And that's without a potential buyout.

Call it like you see it,

Nick

Green Energy Investing

This article originally appeared in the Green Chip Review on July 17^th, 2008 as an in-depth report on today's green energy investments. With the current state of the energy market, and the looming boom in green energy, we felt readers of Wealth Daily could also profit from the information presented in this article. Enjoy

So the markets are in the pits. Citizens are lining up for hours—predawn hours—to withdraw money from their failing banks. And the Dow is at it's lowest point since July. . . of 2006.

At this point, many portfolios are in a holding pattern. The so-called credit crunch, and the resultant housing collapse and severe stocks market downturn, has led to the shrinking of savings and the defaulting of millions of mortgages.

And yet, there's no point in selling—houses or stocks. Why sell a long-term investment for less than you paid for it, especially if its likely that the price will rise again in the next few years?

The same holds true for green investments. Some that you've picked up so far may showing red returns at the present time. But as longs as you're willing to hold out, they'll rise again once market conditions begin to improve and policies are put forward that actually deal with our energy and environmental solutions instead of just implementing laws du jour aimed only at swaying public opinion or cushioning constituents' bottom lines.

In the meantime, it's still possible to make money on the bull side of things, but it's going to take more than a promising press release. To make money in this market, you have to know the ins and outs of the green energy market and how it's developing.

What's more, if you can get past the guttural reaction to simply watch from the sidelines, there are some good buys to be had in this down market. Ones that are off their recent highs, but will return to those levels or higher as the market rebounds.

With that in mind let's take a look at the current state of the renewable, both from an output and monetary standpoint, in an effort to identify which areas are ripe to buy in troubled waters.

Investing in Green Energy: Growing, Growing

First and foremost, green energy investing has been, and will continue to be, a runaway train scenario. Check out the total annual green investment data for the past few years:

2004, $33.4 billion
2005, $58.7 billion, 76% growth
2006, $92.6 billion, 58% growth
2007, $148.4 billion, 60% growth

In that time, total public market transactions have also skyrocketed. The following data includes IPOs, secondary offerings, and convertible bond issues:

2004, $800 million
2005, $5.6 billion
2006, $12.6 billion
2007, $27 billion

Take a look at just one more set of data. These are total green venture capital and private equity numbers from early stage through over the counter listing:

2004, $2.4 billion
2005, $6.4 billion
2006, $9.3 billion
2007, $13.5 billion

These numbers are impressive, showing not only the strong growth of the renewables industry, but also indicating—via the 2007 venture capital data—that the industry is far from saturated and that billions are still being wagered on its future success.

But the effects of the credit crisis began to rear their ugly heads early in 2008, resulting in few new IPOs and stock prices down an average of 17.9%. This tightening of the markets spawned increased merger and acquisition activity, as it generally tends to do.

Yet for all the recession talk and bear banter, overall investment in green technology during the first half of 2008 has actually been above the levels seen during the first half of 2007.

And, according to Global Trends in Sustainable Energy Investment 2008:

Although asset finance is down somewhat, venture capital and private equity invesment, public market capital raising and stock prices are all healthy, indicating that the finance community still sees strong fundamentals underlying the sector and is increasingly looking to take part in its future growth.

Investment between now and 2030 is expected to reach $450 billion a year by 2012, rising to more than $600 billion a year from 2020. The sector's performance during 2007 sets it on track to achieve these levels, with the current credit crunch testing the market's resolve, but not dislodging it.

In many ways, our current sentiment as retail investors is out of line with the rest of our financial brethren. The problem is not a lack of investment—indeed, investment flows have continued to grow—but rather the broadening of the sector and the diversification of green investment options, which now run the full gamut, from primary energy production in the form of electricity and transportation fuels to demand-side management solutions for the end user, including smart grid technologies.

So yes, it's becoming more difficult to find a good green investment because of all the options. But it's certainly not impossible.

And it's Green Chip's role, along with our other publications, to help you do that.

Where's the Green Investing Money Going Now?

Despite the limelight shone on the solar industry, the wind industry has and continues to attract the most investment—$50.2 billion in 2007.

Although, solar's limelight isn't entirely undeserved, $28.6 billion of new investment flowed into that sector in 2007. Investment in solar has grown at a 254% clip since 2004.

Not surprisingly, most of that money traded hands in Europe, with the U.S. in second place. But China, India and Brazil are attracting a growing amount of capital as their share of asset investment has doubled since 2004.

A large portion of green investment ($84.5 billion) in 2007 went toward building new sustainable energy assets. This is a result not only of factory and capacity expansions, but also of massive installations of solar systems are wind farms.

When put together, wind, solar and biofuels accounted for about 85% of new investment in 2007. Here's the chart of total green investment in 2007:

But the chart for just public market green investment looks strikingly different:

Public markets are dominated by wind and solar alone, to th tune of 81%. This is obviously where our money should be as well.

A good place to start is probably with Iberdrola Renovables (MCE: IBR), whose $7.2 billion IPO last December accounted for over half the money raised in 2007 via initial public offerings.

That's an installation play, and a good one. For a turbine play, try the company with which Iberdrola recently inked the biggest wind transaction ever, Gamesa (MCE: GAM).

On the solar side of things, production is still very much key. You should be looking for mid-size companies with extensive growth and expansion plans that have a steady supply of raw materials.

Solarfun (NASDAQ: SOLF) is one such company. Members of the Alternative Energy Speculator have already seen gains in excess of 60% on that stock. And there's probably more upside to be had.

Installers of both traditional solar and concentrating solar will also begin to receive increased attention.

We'll continue to cover broad topics like this again in my next issue of the Green Chip Review. Instead of focusing on which sectors are getting the public and asset money, we'll focus on the up-and-comers claiming victory in green venture capital and private equity.

In the meantime, don't miss another day's worth of profits by sitting on the sidelines.

The team of analysts at the Alternative Energy Speculator has uncovered an undervalued company operting in the green energy space. Their technology could be a game-changer, and deliver massive profits to those who get in early.

Call it like you see it,

Nick

The Pickens Energy Plan

Chalk another one up to clean technology.

Legendary Texas oilman, billionaire and America's 117^th richest person, T. Boon Pickens, has unveiled a $58 million public relations blitz focused on persuading Americans to reduce their dependence on foreign oil by turning increasingly to natural gas and wind.

Called The Pickens Plan, the project calls for an estimated $1 trillion government investment to displace electricity currently produced with natural gas with clean wind power.

Then, the resultant excess natural gas capacity would be used to power cars and trucks.

T. Boone, the plan's creator, says it would alleviate hundreds of billions of dollars currently spent on oil while creating thousands of U.S. jobs.

According to Pickens, ""I've drilled more dry holes and also found more oil than just about anyone in the industry. With all my experience, I've never been as worried about our energy security as I am now."

But don't get it twisted. Pickens isn't hugging trees just yet. It's all about the bottom line, and T. Boone is heavily vested in both the wind and natural gas industries.

In fact, he's spending $12 billion on what could prove to be the world's biggest wind farm—in Texas, of all places.

Another of his ventures, Clean Energy Fuels (NASDAQ: CLNE), builds and operates natural gas fueling stations for vehicles.

Said Pickens: "Don't get the idea that I've turned green, my business is making money, and I think this is going to make a lot of money."

Making Money with The Pickens Energy Plan

According to The Pickens Plan website:

America is in a hole and it's getting deeper every day. We import 70% of our oil at a cost of $700 billion a year - four times the annual cost of the Iraq war.

I've been an oil man all my life, but this is one emergency we can't drill our way out of. But if we create a new renewable energy network, we can break our addiction to foreign oil.

Breaking that addiction is shaping up to be a multi-billion dollar business, and the "Oracle of Oil" is placing his bet right now.

It's probably wise to follow his lead. In addition to Energy & Capital, Pickens was one of the few insiders calling for $100 oil when that price seemed unfathomable. And the realization of his most recent call for $150 oil seems imminent.

Even if all the points of the plan don't come completely to fruition, the wind and natural gas industries are still poised for a boon.

Just in July, T. Boone's natural gas provider Clean Energy Fuels has:

been awarded a five-year contract from the City of Akron to operate and maintain the fueling station for the city's 45 full-sized compressed natural gas buses
received two liquefied natural gas supply contract renewals from the City of Phoenix that will add $6.7 million to the company's bottom line
secured nearly half its supply of natural gas through June 2011 by entering into an extended definitive agreement with its supplier, Williams Four Corners

Clean Energy Fuels is probably a good place to be. More and more fleets, both governmental and corporate, are switching to natural gas vehicles everyday, for both economic and ecologic reasons.

As this trend plays out, all those fleets are going to need natural gas fueling stations. And Clean Energy is the foremost player in that game.

Another lucrative way to play the emergence of natural gas vehicles would be to invest in the company making natural gas engines. This report has all those details.

The Windier Side of Energy

Pickens isn't just betting on natural gas. He also has ambitious plans to build the world's largest wind farm on the Texas panhandle—for a modest $12 billion.

Back in April. T. Boone made the first down payment on 500 wind turbines at a cost of $2 million dollars each. GE (NYSE: GE) was the lucky beneficiary of that transaction.

But that initial $1 billion (for the 500 turbines) hardly puts a dent in the now $12 billion price tag—the project was originally estimated to cost a mere $6 billion.

By 2012, about 2,700 turbines are slated to be erected on 200,000 acres of the Texas panhandle. That's four times bigger than the word's current largest wind farm.

When finished, 4,000 turbines will crank out enough electricity to power over one million homes.

But a billionaire-oilman-turned-wind-investor isn't the only indication of the momentum the wind sector possesses.

In 2007, wind received the most investment dollars of any clean technology with $50.2 billion, or 43% of all new green investment. It was also the leader in 2006 when it was responsible for 38% of new investment.

The wind industry also dominated asset finance in 2007, receiving about $38.9 billion or 46% of all new-build asset investment, which basically means steel in the ground in the form of either wind farms, solar power plants or biofuel production facilities.

To date, 94 gigawatts (GW) of wind capacity have been installed worldwide, with 20 GW coming online in 2007, led by the U.S., China and Spain.

Wind also received the most public investment in 2007, raising $11.3 billion. It should be noted, however, that $7.2 billion of that investment came just from the IPO of the world's leading wind installer and wind farm manager, Iberdrola Renovables (MCE: IBR).

The wind industry has also been a favorable environment for exits of venture- and private equity-funded companies, as well as for mergers and acquisitions. This has been evidenced by Energias de Portugal's $2.93 billion purchase of Horizon Wind and Scottish & Southern Electric's $3.2 billion purchase of Airtricity.

More recently, investor interest in wind power has heated up due to a report from the U.S. Department of Energy claiming wind can provide 20% of all U.S. Electricity needs by 2030.

For that to happen, more than half a trillion dollars needs to be invested in new turbine manufacturing capacity and capital projects. Just in the first quarter of 2008, the U.S. Installed 1,400 MW of new wind capacity with a price tag of $3 billion. Expect that trend to continue and expand.

The way to profit from this part of Pickens Plan is to stake your claim now in a variety of turbine manufacturers, both foreign and domestic, and also in wind farm developers and owners.

These could be juggernaut wind companies like Vestas Wind Systems (COP: VWS) and Gamesa (MCE: GAM), or in large development firms like Fluor (NYSE: FLR).

Of course, there's also a handful of smaller companies that stand to make a fortune as the wind industry continues to mature.

While it's nearly impossible to say which of those smaller companies are going to succeed as this story unfolds, we'll be providing daily and weekly commentary and recommendations on the matter in all of our publications:

Get ready for a literal windfall of profits.

Call it like you see it,

Nick